RESEARCH & RESOURCES

BI Players Forge Roads into the Mid-Market

Is the industry delivering tools that make it easier for mid-market customers to take the BI plunge? The answer: absolutely.

By Stephen Swoyer

June 11, 2008

It was just about 18 months ago that business intelligence (BI) players started talking about the mid-market -- the small- and medium-sized enterprise (SME) segment that industry watchers say is poorly served by many commercial, off-the-shelf (COTS) BI packages.

With everyone from then-independent players Business Objects SA, Cognos Inc., and Hyperion Solutions Inc. -- along with heavyweights such as IBM Corp., Microsoft Corp., and SAP AG -- expressing interest, this latest incarnation of mid-market concern looked like it might actually take.

So, a year and a half later, how are they doing? Has the BI industry succeeded in breaching a mid-market nut that's proven to be historically difficult to crack?

More importantly, how have BI players responded to the specific needs of mid-market customers? Are they delivering solutions that, in one way or another, make it easier for resource-strapped mid-market customers to take a BI plunge?

It's starting to look like it. At last month's TDWI Spring World Conference in Chicago, for example, a surprising number of BI players wanted to talk about the mid-market. These weren't just start-up or traditional SME players, either. These were BI giants such as SAS Institute Inc., whose midmarket presence has hitherto been confined to researchers or statisticians in SME organizations. Also eager to talk about the SME market was respected heavyweight (and fellow BI independent) Information Builders Inc. (IBI), which -- though it has had its share of midmarket success -- is more frequently associated with huge reporting deployments in financial services, insurance, and other verticals.

Even data warehouse (DW) appliance players, which have typically focused on the Big Data crowd (e.g., retailers, telecoms, financial services), are talking about reaching out to mid-market customers.

"Up to this point, we've been selling speed and feeds to technologists. Someone has a data warehouse that's performing very badly. They're investing lots of money in performance tuning. Now they're saying, 'You know, we've come as far as we're going to by adopting this approach.' Nowadays, most people are looking for a business solution. They don't just want to throw technology at a general problem. They want specific solutions designed to solve specific business problems," says Tim Young, vice-president of marketing for Netezza.

"At the moment, we're retooling our operations to start focusing more on specific industries. We'll be focusing on specific verticals, and not just in the high-end, where we've [traditionally] played. We think there's a real opportunity in the sort of medium enterprise [segment]," Young explains.

He cites his company's vertical-specific efforts with the Netezza Developer Network (NDN) that it launched in September of 2007. The goal of the NDN is to enable software developers to incorporate their own programmatic logic into Netezza's snippet processing units (SPU). SPUs do the data processing heavy-lifting for Netezza's Performance Server (NPS) appliances.

What Netezza is doing with NDN appeals to SME customers, Young maintains, because it gives them a measure of control over their BI and data warehousing (DW) implementations and let's them more easily adapt NPS to suit their own -- often very specific -- requirements.

"We have about 70 companies that have signed up [for NDN] already, and they're building applications … that range from all sides of the spectrum," Young explains. "They're doing application-side processing, [where they're] basically embedding [application logic] into the Netezza SPU, so as the data streams off the [hard] disc, all of this analysis happens at this kind of raw data level, such that the only thing that gets passed back to the client is basically the results of a data set," he continues.

Mid-market customers are particularly deaf to products that are long on technology prescriptions and short on business specifics, Young notes. As a result, he hopes, Netezza's NDN push -- with its SDK and open APIs -- will help prime the mid-market for its NPS appliances.

"We can deliver [to customers] these business-oriented applications, where the value of those applications is absolutely crystal clear. It's for specific applications -- things like re-rating or geo-spatial-type simulations -- so [customers] know what going to get before they buy," he observes.

"They're much more concerned about it than they are in the enterprise," says president and CEO Pradeep Tapadiya. Software Labs should know: it caters to SME customers. Contrary to what you might think, Tapadiya argues, mid-market customers want more flexibility than large enterprises do.

"[SMEs] are quite different. They'd like less hand-holding, more control. From my experience, what happens is that [if I'm a mid-market customer], even if I outsource -- and more frequently, they are looking to outsource -- I always want to feel that I'm in control, because if things go out of control with this outsourcing, you need to know [that you can take it over yourself]," Tapadiya explains. "What [midmarket customers] want is to make sure that they're not dependent on any company."

Tapadiya doesn't buy the claim that SME customers are comparatively resource-strapped, at least when it comes to IT talent. In many cases, he points out, SME customers are getting by largely on the game-breaking talents of their in-house IT staffs -- performing, for example, highly complex data integration (DI) extractions, transformations, and loadings by means of programmatic SQL.

There's a flip side to this coin, of course. Although the claim that all mid-market companies are resource-strapped clearly isn't true, the fact remains that plenty of SME firms could use a helping hand, at least when it comes to an esoteric practice such as data integration.

What mid-market customers typically want are solutions that let them cater to either in-house talent (e.g., SQL experts) or to critical stakeholders (e.g., novice business users) -- or both. In this sense, Tapadiya concedes, they're a lot like large enterprise shops. However, rather than lagging behind the enterprise market in this regard, he argues, the mid-market has actually been in the avant-garde. Some of the usability features that are now cropping up in the Big Enterprise ETL tools -- e.g., drag-and-drop UIs and a more collaborative user experience (to better involve business stakeholders) -- have been part-and-parcel of Software Labs' mid-market DI product for a long time now, Tapadiya maintains.

"If you look at all of the functions that we have within our product, somebody who's highly technical, they can probably do everything in SQL Server writing complex queries. For many [SMEs], that's what they're doing," he contends. "What companies have been saying is that they also need some simpler functions so that they can involve [their business stakeholders] in the process, so we've tried to focus on making [our tool] as simple to use as possible. We have a two hour training program. At the end of the two hours, they're ready to go."

Software Labs patterns xFusion Studio on a very familiar paradigm: the Microsoft Office suite. The xFusion interface isn't a replica of the Office UI, Tapadiya concedes, but it does shoot for a similar user experience, with Office-like toolbars, menu items, and other features. The idea, he says, is that once customers start using xFusion, they get quickly up to speed -- in part because they're assimilating a kind of portable knowledge from their other UI experiences.

"We wanted to deliver the same kind of look and feel so that people know what to expect, so if you open an existing [xFusion] document, or you save it, it's really very similar to what you're familiar with [in Office]," Tapadiya contends. "That's been one of our goals [in the mid-market] all along: to make sure that people feel comfortable using the product. That's something that only recently you're starting to see in [DI tools aimed at large enterprise customers]."

A Different Kind of Customer

Software Labs likes to say that it's ahead of the curve, so to speak, with its long-time emphasis on mid-market BI, but BI and DI vendors who've gone through a come-to-mid-market transformation find that the economics of that segment -- which are very different from the large enterprise space -- appeal to them.

Take Michael Corcoran, chief marketing officer with IBI. He seems all but smitten with mid-market buyers.

Such customers typically eschew much of the thrusting and parrying that large enterprise customers -- accustomed, for example, to evaluating a fixed number of vendors for an RFP -- typically employ, Corcoran points out. "The midmarket companies are just a pleasure to do business with. There's no nonsense. There's no evaluating-technology-for-the-sake-of-evaluating-technology. They just don't have the resources. They don't have evaluation teams like that," he comments. "What we hear, instead, is, 'Hey, I've got a problem, and if you can prove to me that you can solve it, we'll do business. It's a much shorter cycle."

There are other benefits, too, according to Corcoran -- benefits that serve both client and vendor alike. "You tend to get very high-level buy-in from the executive team, you're certainly going to meet the CIO very early in the cycle, and sometimes you're able to meet with all of the stakeholders at one time," he indicates.

"There's such buy-in to the problem [i.e., why do BI] itself. There's such awareness, from top to bottom, in mid-sized companies," Corcoran continues, contrasting this awareness with what he describes as a kind of "segmentation" in the large enterprise. "When you find problems in a large enterprise, you're going to find it at a business level-unit. You're going to have to somehow map that back [throughout the enterprise]. It's just a much longer, harder process to do."